The sugarcane-biofuel expansion and dairy farmers' responses in Brazil

The expansion of sugarcane for biofuels is a highly contentious issue. The growth of sugarcane area has occurred simultaneously with a reduction of dairy production in São Paulo state, the primary production region for sugar and ethanol in Brazil. This paper analyses different dairy farm rationales to continue dairy production in the context of a dramatically expanding sugarcane economy. Combining different data sets – semi-structured interviews with 34 farmers and baseline data from all members of a dairy farm co-operative – makes it possible to recognize different farm types. This heuristic tool is used to identify the various strategies regarding shifting to biofuel production or investing in dairy farming. The paper identifies labour availability, household resilience and technology introduction as key factors in the context of complex, multiple interactions between the biofuel sector and dairy production. We will argue that biofuel-sugarcane expansion not always pushes aside dairy farming. Those farmers that shift to sugarcane are not simply spurred by better prices, but mainly change as result of perceptions of labour constraints, risks and the opportunities offered by diversification. For farmers who totally quit dairy production the shift to sugarcane may pass the point of no return.